it is forcing defense related businesses to cut back. some saying they're already losing contracts. jonathan serrie live on this story for us today from atlanta, georgia. hi, jonathan. >> reporter: good morning, martha. the big problem here is sequestration. although congress has delayed the automatic spending cuts until march, they have not delayed the uncertainty surrounding defense funding. watch. just miles from fort bragg, k-2 solutions trains dogs for police and military use. and provides research and development for equipment and weaponry. but the status of new defense contracts is unclear for this company that employs 274. >> in the past seven months we submitted eight proposals. two of them have been canceled. the other ones are in limbo for up to eight months. >> reporter: this disabled army veteran is ceo of a small company that markets facial recognition technology. >> we late last fall got turned down for funding twice because they said working for the federal government was too unstable. >> reporter: some companies can survive by marketing that irservices to a wide ran